Making Tax Digital

In the March 2015 Budget, the Government committed to transforming the tax system through digital technology and ending the need for annual tax returns. As further progress towards this, it has now been announced that, from 2018, businesses, the self-employed and landlords who are keeping their records digitally and providing regular digital updates to HMRC will be able to adopt pay-as-you-go tax payments, enabling them to choose payment patterns that suit them and better manage their cash flow.

Simple Assessment

For 2015/16 and subsequent tax years (effective from the date of Royal Assent to Finance Act 2016) HMRC will have a new power to make a ‘simple assessment’ of an individual’s or trustee’s income tax or capital gains tax liability without that person first being required to complete a self-assessment tax return. HMRC will instead assess their tax liability on the basis of information already held. HMRC can issue more than one simple assessment in a tax year.

The assessment is subject to appeal within 60 days, or suspension by HMRC without a formal appeal. If the assessment is suspended, the person will be required to pay the amount not in dispute, and HMRC must then either confirm or withdraw the assessment, or issue a further assessment either in addition to, or in place of, the original. There is still a right of appeal if the person disagrees with the assessment after the suspension is lifted.

The amount due, less any payments on account and income tax paid at source, is payable on or before the 31 January after the end of the year of assessment, or, where the notice was after 31 October following the year of assessment, three months after the day on which that notice was given.